BEIJING, June 19 /PRNewswire-Asia/ -- eFuture Information Technology Inc.
(Nasdaq: EFUT, the "Company" or "eFuture"), a leading provider of software and
services in China's rapidly growing retail and consumer goods industries,
today announced that eFuture will likely need to make an accounting adjustment
to its unaudited earnings reports for quarters ended March 31, June 30,
September 30 and December 31, 2008 and March 31, 2009 and that those reports
should no longer be relied upon. Since eFuture is currently in the process of
assessing the anticipated adjustments, the Company has not determined the
extent of the correction.
The specific areas being assessed for accounting adjustments relate to (i)
our accounting for a depository reserve we must maintain in China for employee
social security costs, (ii) the timing of our recognition of revenues upon
sales of some of our software products, and (iii) the method by which we
calculate our costs of revenues.
First, we have determined that we have not reserved an adequate amount for
these purposes and, as a result, will revise our previously-reported unaudited
earnings for the above periods. As a foreign private issuer, we are not
required to file quarterly reports but have traditionally provided such
information to investors. The correction of the reserve for employee social
security costs will result in operating losses in our annual report on Form
20-F that are in excess of those disclosed in our unaudited quarterly earnings
reports during the four quarters of fiscal year 2008. This correction will
also increase operating losses for our first quarter 2009 beyond those listed
in our press release dated June 9, 2009.
Secondly, some of our software products include rights to one year of
maintenance to ensure that the software operates properly for the purposes
sold. We previously deferred recognition of 10% of the software contract
amount for a one-year period from the date of sale and recognized it as
revenue after the one-year maintenance period had passed. Our management has
determined that these amounts should instead be recognized evenly over the
maintenance period. This correction will result in the accelerated recognition
of revenues and associated costs of revenues but will not change the ultimate
amounts we recognize per service contract.
Finally, our management has determined that it will further improve the
accuracy of reflecting its costs of revenues through allocation on the basis
of labor costs. We previously allocated our costs of revenues based on
out-of-pocket expenses on projects. The change from allocation based on
out-of-pocket expenses to allocation based upon labor costs will result in a
more accurate estimate of costs of revenues by project, but is not expected to
have a material change to the reporting of costs of revenues.
The anticipated accounting adjustments are intended to ensure adequate
reserve of social security benefits for our employees and enhance the accurate
recognition of revenue and associated costs to better reflect our expanding
business and operational performance. The Company remains on track to continue
the growth momentum and reaffirms our recent upward revision of 2009 revenue
guidance of USD28 million to USD29 million, representing annual revenue growth
of 38% to 40%.
About eFuture Information Technology Inc.
eFuture Information Technology Inc. (NASDAQ: EFUT) is a leading provider
of software and services in China's rapidly growing retail and consumer goods
industries. eFuture provides integrated software and services to manufacturers,
distributors, wholesalers, logistics companies and retailers in China's
front-end supply chain (from factory to consumer) market, especially in the
retail and fast moving consumer goods industries. eFuture currently serves
over 15 Fortune 500 companies, over 1,000 retailers and over 5,000 suppliers
operating in China. eFuture is one of IBM's premier business partners in Asia
Pacific and is a strategic partner with Oracle, Microsoft, JDA, Motorola and
Samsung Network China. eFuture has more than 600 employees and 20 branch
offices across China. For more information about eFuture, please visit
http://www.e-future.com.cn/ .
Safe Harbor
This announcement contains forward-looking statements. These statements
are made under the "safe harbor" provisions of the U.S. Private Securities
Litigation Reform Act of 1995. These forward-looking statements can be
identified by terminology such as "will," "expects," "anticipates," "future,"
"intends," "plans," "believes," "estimates" and similar statements. Among
other things, 2009 financial outlook and quotations from management in this
announcement, as well as strategic and operational plans, contain
forward-looking statements. eFuture may also make written or oral
forward-looking statements in periodic reports to the Securities and Exchange
Commission (the "SEC"), in its annual report to shareholders, in press
releases and other written materials and in oral statements made by its
officers, directors or employees to second parties. Statements that are not
historical facts, including statements about the Company's beliefs and
expectations, are forward-looking statements. Forward-looking statements
involve inherent risks and uncertainties. A number of factors could cause
actual results to differ materially from those contained in any
forward-looking statement, including but not limited to the following:
eFuture's anticipated growth strategies; eFuture's future business development,
results of operations and financial condition; expected changes in the
Company's revenues and certain cost or expense items; eFuture's ability to
attract customers and leverage its brand; trends and competition in the
software industry; the Company's ability to control expenses and maintain
profit margins; the Company's ability to hire, train and retain qualified
managerial and other employees; the Company's ability to develop new software
and pilot new business models at desirable locations in a timely and
cost-effective manner; the performance of third parties under contracts with
the Company; the expected growth of the Chinese economy software market in
retail and consumer goods industries; and Chinese governmental policies
relating to private managers and operators of software and applicable tax
rates.
Further information regarding these and other risks is included in
eFuture's annual report on Form 20-F and other documents filed with the SEC.
All information provided in this press release and in the attachments is as of
June 19, 2009, and the Company undertakes no duty to update such information
or any other forward-looking information, except as required under applicable
law.
For more information, please contact:
Investor Contact:
Troe Wen, Company Secretary
eFuture Information Technology Inc.
Tel: +86-10-5293-7699
Email: ir@e-future.com.cn
Investor Relations (US):
Mahmoud Siddig
Taylor Rafferty
Tel: +1-212-889-4350
Email: eFuture@Taylor-Rafferty.com
Investor Relations (HK):
Ruby Yim
Taylor Rafferty
Tel: +852-3196-3712
Email: eFuture@Taylor-Rafferty.com
Media Contact:
Jason Marshall
Taylor Rafferty
Tel: +1-212-889-4350
Email: eFuture@Taylor-Rafferty.com
SOURCE eFuture Information Technology Inc.
